Which of the Following Is an Example of Economies of Scope

question 21

Multiple Choice

Which of the following is an example of economies of scope?

• A) Declining average fixed costs due to increasing levels of capacity utilization
• B) A single computer center supports multiple business units
• C) Amortization of capitalized software
• D) The divestiture of a product line
• E) Shifting production from an underutilized facility to another to achieve a higher overall operating rate and shutting down the first facility

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Definitions:

Tax Increase

The act of raising the rates of taxes imposed by the government, which can affect consumer spending, investment, and overall economic growth.

Sales Tax

Sales Tax is a tax levied on the sale of goods and services, typically collected by the retailer at the point of purchase and then passed on to the government.

Demand For Jewelry

The consumers' desire and willingness to purchase jewelry, which can be influenced by factors such as income levels, fashion trends, and cultural practices.

Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, expressed as a ratio or percentage.